Bringing the Effects of Occupational Licensing into Focus: Optician Licensing in the United States

Abstract

The labor market institution of occupational licensing continues to grow in scope in the United States and abroad. In this paper, we estimate the effects of occupational licensing on opticians using data from the US Census and American Community Survey. Our results suggest that optician licensing is associated with opticians receiving as much as 16.9 percent more in annual earnings. In an examination of malpractice insurance premiums in all states and participation rates in optician certification programs in Texas, we find little evidence that optician licensing has enhanced the quality of services delivered to consumers. By and large, optician licensing appears to be reducing consumer welfare by raising the earnings of opticians without enhancing the quality of services delivered to consumers.

Keywords

Keywords

Appendix

Estimates of the Effects of Optician Licensing on Optician Employment-Population Ratio

(1)

(2)

(3)

(4)

(5)

(6)

Licensing Dummy

0.0000412

(0.0000718)

Licensing Duration

0.000000217

(0.000000978)

Number of Exams Required

0.0000216

(0.0000229)

Days of Education Required (100s)

0.00000335

(0.00000430)

Licensure (1–5 years)

0.0000337

(0.0000654)

Licensure (6–10 years)

0.00000528

(0.0000408)

Licensure (More than 10 years)

0.0000428

0.0000747

License Index

0.00000116

(0.00000604)

State and Time Fixed Effects

Yes

Yes

Yes

Yes

Yes

Yes

R2

0.14

0.14

0.14

0.14

0.14

0.14

n

848

848

848

848

848

848

Source: All licensing data are from Carpenter et al. [2012], and each state’s licensing board and licensing statutes. All other data are from the 1940–2000 US Census and 2001–2012 American Community Survey.

Note: Standard errors are adjusted for state clustering. Observations from the state of Texas (which has a certification law) are excluded from the analysis. Real personal income per capita is an additional control in each regression.

*Significance at the 10 percent level; **Significance at the 5 percent level; ***Significant at the 1 percent level.

Falsification Test — Estimates of the Effects of Optician Licensing on the Natural Logarithm of Lab Technician Earnings ($2012)

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

Licensing Dummy

0.357

0.318

(0.0461)

(0.0546)

Licensing Duration

0.000201

0.00123

(0.000721)

(0.00231)

Number of Exams Required

0.0148

0.0113

(0.0237)

(0.0271)

Days of Education Required (100s)

−0.0109***

−0.0170***

(0.00395)

(0.00293

Licensure (1–5 years)

0.0349

0.0491

(0.0421)

(0.0379)

Licensure (6–10 years)

0.00308

−0.0593**

(0.0362)

(0.0270)

Licensure (More than 10 years)

0.0390

0.00291

(0.0458)

(0.0529)

Individual Controls

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

State and Time Fixed Effects

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Linear and Quadratic State Trend

No

Yes

No

Yes

No

Yes

No

Yes

No

Yes

R2

0.21

0.21

0.21

0.21

0.21

0.21

0.21

0.21

0.21

0.21

n

303,463

303,463

303,463

303,463

303,463

303,463

303,463

303,463

303,463

303,463

Source: All licensing data are from Carpenter et al. [2012], and each state’s licensing board and licensing statutes. All other data are from the 1940–2000 US Census and 2001–2012 American Community Survey.

Note: Standard errors are adjusted for state clustering. Observations from the state of Texas (which has a certification law) are excluded from the analysis. Individual controls include real personal income per capita, age, and dummy variables for race, gender, Hispanic origin, and education.

*Significance at the 10 percent level; **Significance at the 5 percent level; ***Significant at the 1 percent level.

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